August 12, 2025 • 40 mins
What if you could buy real estate, pull all your money back out, and still build long-term wealth? That’s the power of the BRRRR method — and in this episode, Corey breaks it all down.
From one college rental to 700+ units, Corey shows how Buy, Rehab, Rent, Refinance, Repeat can be your path to financial freedom, even with today’s interest rates.
Inside this solo episode:
- How a $300K property can build $200K–$450K in wealth over 15 years
- Why cash flow is nice, but equity and refinancing are the real wealth builders
- The shocking truth: 7% vs. 5.5% interest? Just a $5K difference in equity after 5 years
- How Corey pulled out $240K tax-free from one BRRRR deal — with no cash flow for two years
- Why just 2 BRRRRs a year for 5 years could get you $170K+ tax-free… every year
- How Wisconsin cities like Green Bay, Oshkosh, and Manitowoc are quietly booming
If you’re tired of waiting on the sidelines, this episode proves that you don’t need perfect market timing — just a smart strategy, systems, and action.
💸 Want BRRRR-ready off-market deals? Join the buyers list at WisconsinDiscountProperties.com — new deals hit your inbox every Monday at 6AM.
🎙️ Subscribe to The Wisconsin Investor for more tactical real estate strategies, mindset shifts, and real-world investing wins.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
What's up everybody?
You are listening to theWisconsin Investor Podcast.
I'm your host, corey Raymond,and today you guys are stuck
with me on a solo episode.
So, before you turn it off andgo somewhere else, hang in there
, because what if I told youthat you could buy a property,
pull your money back out andkeep building wealth over and
(00:21):
over again?
That's what we're gonna getinto today, guys how to build
some massive, massive wealth.
Before I do that, though, ifyou're brand new to the
Wisconsin Investor Podcast, Iwant to just give you a little
bit of insight.
We've been now recording sinceOctober.
I think we're probably comingup on 40, 50 episodes.
You can probably tell, whereveryou're watching this, where
we're at on this thing.
If we you know.
(00:43):
If you're not from Wisconsin,you have no interest in
Wisconsin.
That's totally okay.
Most of what we discuss on thisshow are either success,
successes and failures ofinvestors here in Wisconsin
locally, but we always bring onother experts as well, so we'll
have somebody.
We just had somebody about noteinvesting.
We have accountants on here.
(01:03):
Recently, a few times we've hadaccountants on here.
We have some attorneys that popon, other industry experts,
some mindset and personaldevelopment type people, so we
have a wide range of differentpeople we try to bring on.
So if you're not looking atinvesting in Wisconsin, but you
are a real estate investor, youwant to be a real estate
investor, you're in the rightspot.
We just happen to focus here.
(01:24):
Investor, you want to be a realestate investor?
You're in the right spot.
We just happen to focus here onWisconsin because we think it
is the best market to beinvesting in.
So with that, one of the thingsI always like to plug is
Wisconsin Discount Properties.
Who sponsors this show?
At Wisconsin DiscountProperties, we put off-market
deals in your inbox every singleMonday morning at 6 am, and a
lot of those deals that we putin there are deals that you can
(01:45):
utilize.
This strategy we're going todiscuss today on the episode.
So, for those of you guyslistening, I'm going to do my
best to describe some things.
Those of you guys watching onYouTube, I'm going to have some
different screen sharing.
I'm going to do here in alittle bit and walk through some
different things to illustratesome of the points that I wanted
to make today on the episode,and we're going to also deep
(02:08):
dive this topic in more detail.
Coming up the fourth Tuesday ofAugust we meet at the Woods Golf
Course in Green Bay.
So if you're wanting to make adrive, if you're not around
Green Bay or you're in the area,come on up to that.
We open the doors at sixo'clock for some networking.
We start at 6.30.
It's called the REI SuccessClub.
You can find the REI SuccessGroup on Facebook and join that
(02:30):
group.
I think we're over 1,000 strongnow in there, so join the group
.
But this is the topic we'regoing to be discussing in more
details this upcoming month.
So when you come there to theseevents, it's really more of an
open format.
We have some panelists, somyself and Zach Morgan, who's
been on the show before, will beon the panel and basically
(02:51):
we'll give you a littlebackground on ourselves and then
we open it up for questions foryou, the audience, to fire away
at us, and the topic will bewhat we're going to discuss
today.
But really you could ask usanything at that point.
So without further ado, let'sget into it and if you've been
in this game for a while, youcan probably guess where I'm
(03:14):
going with this episode.
It is my favorite strategy inreal estate investing and it is
called the BRRRR method.
We've been talking in the lastfew episodes about a BRRRR
course that I have.
We're now giving it away forfree.
So if you join our buyers listat
wisconsindiscountpropertiescom,you can talk to Connor or Reese
on our team and they'll get youset up with the course for free.
So check that out.
But this is one of the mostpowerful strategies in real
(03:34):
estate investing and here's whyit's powerful.
A couple of things you canforce appreciation through
rehabbing these properties.
So what we're talking abouthere is the BRRRR and it's an
acronym.
And so, again, for those of youthat are experienced, you're
like oh, I know the BRRRR, thisis going to be elementary, I
already know all about thisstuff.
Hang on, tune in.
We're going to get into someexamples.
We're going to hopefully lighta fire under your butt today If
(03:57):
you're not utilizing thisstrategy or you've slowed down
on it a little bit like myself.
Actually, when I do this episode, I'm like gosh, I got to get
more, doing more of these things.
Right, as I look at the numbersin particular, which we're
going to get into today, I'vegot some examples to show you,
guys that are pretty powerful.
But it stands for buy, rehab,rent, refinance, repeat Okay,
(04:19):
and I could get into all thesemantics of how we're going to
do that.
We'll see how long this episodegoes and if I get into some of
those details, but essentiallywhy that's powerful.
If you were to go and buysomething on the MLS today,
right, and it's turnkey, there'sno rehab needed, the rents are
at market rent.
You're going to put 20 to 25%down on that property, okay, so
(04:43):
if you've got a limited amountof cash available, you are
putting the money down on thatproperty.
Okay, so if you've got alimited amount of cash available
, you are putting the money downon that property and then that
money's going to sit there for awhile.
Right, that property now has toappreciate.
Your tenants got to pay thatdebt down far enough that you
could refinance that property atsome point and pull your
capital back out if you wantedto recycle that money.
So for most people they don'thave briefcases full of cash
(05:04):
just sitting around to go invest, and so when they start
plotting out their real estatejourney, they look at things and
they say, man, I would love toget to say a hundred units,
right, but I don't have thatkind of cash sitting around, you
know, to get to that number.
That's a lot of down paymentmoney to put in, okay, and again
, that doesn't count any kind ofCapEx that would come up and
(05:26):
other things like that.
And so what this strategy allowsyou to do is utilize a smaller
amount of cash.
It doesn't have to be your cash.
You can borrow that money froma friend, family member,
somebody in your network that'swilling to give it to you.
Helocs are a great option touse for this money.
You use that for a short periodof time.
You rehab the property, you getthe rents up to where the
(05:49):
market rent is.
Then you refinance thatproperty.
And why that's important?
When you go to purchase aproperty, banks are going to
look at it typically.
Now there's commercial lendersin Wisconsin, thankfully, that
are pretty creative, and so ifyou have the right connections
at some of these banks, you canavoid some of the steps in this
process.
But traditionally how it worksis they are going to require 20
(06:13):
or 25% down off of the purchaseprice or the appraised value,
whichever is lower.
Okay, so what they're saying islet's say, you bought, you got
a great deal on a property.
You bought it for 50,000, right, you know, right now it's worth
a hundred thousand dollars.
Traditionally, banks are goingto make you, they're going to
(06:34):
lend off of the $50,000 mark.
They don't care that you haveall this equity in the property
at purchase, so you have to buyit.
Then you would have torefinance it anyway If you
wanted to pull that money out.
Most people just leave it sit,okay, so what this allows you to
do is you're recycling capital.
So you buy it, you increase thevalue and, as quickly as you
can do that, you refinance theproperty.
(06:55):
And now, now, let's say, itappraises at a hundred thousand.
Well, now most banks will lend80% of that number.
You now can get $80,000 back,right?
So now you can go do anotherdeal and do another deal and do
another deal.
So it's a very, very powerful,very, very powerful strategy.
Okay, it also allows you tobuild a lot of equity over time,
(07:20):
right?
So it's not a huge cashflowdeal, right?
You're not typically going todo this for cash flow.
You're going to do this tobuild equity.
There's some tax strategiesinvolved.
We did a couple episodes onthat, so I'm not going to get
too much into the tax strategypiece of this, but just know
that that is another hugebenefit to doing this strategy
(07:43):
is some of the tax benefits,especially if you can consider
yourself a real estateprofessional.
And so, overall, to buildwealth again, not cash flow to
build wealth this strategy istough to beat.
All right, now a lot of peopleout there, especially outside of
(08:03):
Wisconsin, are going to turnand they're going to say they're
going to say you can't do thisstrategy anymore.
It doesn't work, right.
And what are they saying?
They're saying you can't finddeals that make sense anymore to
do this on.
They're going to say that youknow you're going to have to
have money stuck in the deals.
There's no way you can get allof your money back out of them.
And that's not true.
(08:24):
We have case study after casestudy that we've done on deals
that we've sold throughWisconsin Discount Properties
where people are pulling all, orat least the majority, out.
They might have 5% stuck in thedeal versus 25% plus all of
their rehab money.
So there's still a lot ofopportunities here, okay.
(08:44):
So what I want to do, guys, Iwant to go through some examples
of this and again, if you havemore questions like how to
finance these deals, all thatkind of stuff there's, there's
the Berg course.
You can get that for free now,or you can come out to our
discussion that we're going tobe having coming up here at the
end of August, all right?
(09:05):
So what I'm going to do, guys,I'm going to share my screen if
I can find it.
So, for those of you guyslistening for the podcast, I'm
going to do my best, okay.
So we're going to do an exampledeal, all right, and here's
some examples and what I did,guys.
I use chat GPT.
If you've been listening tothis show, you know that I'm a
huge chat GPT fan.
Okay, but what I'm going to dois I'm going to use an example.
(09:27):
So what I said is I have a dealthat's $300,000 ARV.
Now I actually have a dealthat's pretty close to this and
I'm going to talk a little bitabout that deal and we're going
to get into a little bit of what, some potential things that can
go wrong with these deals too.
So that is a real possibilityhere, and I'm trying to get my
(09:48):
screen to work so that I canread it and make sure I'm doing
this appropriately.
Here we go, all right.
So I said, yeah, I want a deal.
It's $300,000 ARVs.
Our lenders will refinance 80%of the LTV, which means loan to
value, and I want to showsomewhere we break even every
year in cash flow and we'refocused on debt pay down.
(10:10):
Show an example with a 20-yearamortization schedule break even
cash flow with a 7% interestrate.
7% is about what I'm gettingquoted right now.
It depends on the lender.
Some are 7.5%, some are 8% atthe time we're recording this,
but 7% if you're shopping itaround.
Typically you can landsomewhere around there and I use
(10:30):
a lot of community banks,commercial financing, to do
these.
A lot of those guys arerelationship based, so you might
get quoted a little bit higherrate right now if you're new to
the game or you don't have anestablished relationship with
some lenders, but that's okay,all right.
So what we're going to do hereand I wanted to show 0% equity
(10:51):
or 0% appreciation, becauseyou'll hear people say, oh, you
can't bank on appreciation.
Right, and that's very true.
You don't want to bank onappreciation.
However, I did an episode, asolo episode.
The last one I actually did wastalking about like basically,
why real estate investing?
And what it basically said wasyou know, you gotta have, you
(11:14):
gotta have some some confidencein real estate.
Over the last, I want to say 76years of this chart.
Real estate's only lost value,and this is across the country,
so real estate is very regional,but it's only lost value.
Maybe I think it was six yearsout of 76.
(11:35):
So we're saying, like worstcase scenario, 0% appreciation
for five years in a row, 10years in a row, 15 years in a
row, and the reason I want to dothis was just to show the power
of the wealth building part ofthe debt pay down piece of this.
Okay.
The other important factor tolook at here is we're using 20
year amortization schedules andthese examples Okay.
(11:56):
Now what does that mean?
If you're new to the game, thatmeans that you're going to be
paying more monthly, so you'repaying that loan off in 20 years
versus, like, a 30 year loan.
A 30 year loan is going tospread that out further, so your
cash flow should be higher, butyou're going to pay less in
principle.
So the wealth buildingcomponent of that property is
(12:18):
not as strong.
So you can play with that alittle bit.
Some lenders it's hard to findin the commercial space where
they'll lend 30-yearamortizations on value-add
properties, but they are outthere A lot of them, especially
when you go to credit unionsthey'll go up to 25 years.
Common, very common, is a20-year amortization schedule.
So break-even cash flow verycommon in this space.
(12:41):
You might even be a little bitnegative every year, but let me
just show you the numbers of whythat still might make sense.
So what we're looking at here wehave a $300,000 after repair
value, arv, brrrr deal.
We're going to do 80% loan tovalue, 7% interest, 20 year
(13:04):
amortization and a break-evencashflow.
So on a 30 year, if you'regetting this property, you're
all into it for $240,000.
That's the goal.
Okay Again, maybe you're at 250.
So you get 10,000 stuck into it.
Maybe you're a little bit less.
We're just going to run it asif we get in a great perfect
bird here.
We got all of our money back.
We got our $240,000.
We stuck into the initialpurchase back plus all the rehab
(13:25):
and everything else.
We were all into it for$240,000.
Our initial equity.
When we refinance that propertywe get our $300,000 appraisal.
We have created $60,000 ofequity Day one of that refinance
.
That's pretty cool.
Now what we look at with a 7%interest, 20-year amortization
(13:47):
equity.
After five years we're now upto $92,000.
And this is with 0%appreciation.
So I didn't include anyappreciation of these situations
here.
Equity after 10 years we arenow $139,000.
So a deal that you broke evenon.
You're not making any moneyevery month on cash flow.
(14:09):
You now have $139,000 of equityafter 10 years.
Equity after 15 years Now we'regetting real close to paying
this thing off.
We only got five years left onthe loan.
We're at $206,000.
Now chat wanted to give me afull amortization schedule and
some charts which I'll show youguys here that are watching on
(14:31):
YouTube.
It's just a cool little chart.
It just shows you your equity,everything I just described to
you.
Thank you, chat, for doing that.
All right, very nice.
Okay, give me a little PDF.
Very, very nice of chat to dothat for me, chat to do that for
me.
(14:51):
Now I said show me that sameexample but let's add in 4%
annual appreciation with thesame parameters as the above
example.
Now and I did not check chat'smath, sometimes you have to
check chat's math, but it seemedlike it lined up pretty good
here.
So our equity after five years,now that we added 4% annual
appreciation and so the loan isstill the same, we're at a
(15:11):
$240,000 loan.
We have 60,000 of equity dayone.
We're at a 7% interest rate,20-year amortization schedule on
our loan.
Our equity is now $157,000after five years.
That's just adding 4%appreciation to the formula.
Equity After 10 years.
We're now at 283,000 and ourequity after 15 years remember
(15:36):
we we had an ARV on thisoriginally at 300,000, right,
our equity now is $446,000 after15 years.
All right.
So now we're going to see alittle chart here for those of
you guys looking here, what thatappreciation really does.
And what you can see is by year20, when that loan is paid off,
(15:58):
that property is now doubled invalue.
It's over $600,000 in value,which is 4% annual appreciation.
Nothing crazy here.
We're not talking about slowand steady now.
Some years it may go down, someyears it may be more than four,
but we're going to say average4% and we're going to get into
some numbers.
I had deep research, do somenumbers of Northeast Wisconsin
(16:18):
and what is the average annualappreciation over the last
couple of years, and so we'llget into some of those numbers
here as well.
All right, let's go down.
I said add in the numbers.
Okay, so it did.
It showed us the spread here,so you can see now, for those of
you guys watching on YouTube.
What was the difference in fiveyears?
So 92,000 was our equity afterfive years, with 0% appreciation
(16:43):
.
We add in just a small amountof appreciation, it's 157,000,
so a pretty big spread there.
You look at the 15-year, you'reat 450,000 of equity compared
to 200,000.
That 4% annual appreciationmakes a big difference.
But regardless, even if youhave 0% appreciation 15 years, a
deal that you have no moneyinto is now worth $206,000 to
(17:07):
you.
Well, it's worth more than that, but the equity is $206,000.
Pretty, pretty powerful, okay.
Now another thing I alwaysthought, and until I started
messing around with thesenumbers I thought man, that 7%
interest rate, if it was likefive and a half percent, I
wonder what that would do to myequity.
It would probably be crazy,right?
(17:27):
My thought is like I'm payingmore principal every month, less
in interest.
Now, while that affects mycashflow and I could have done
some cashflow scenarios, but fortoday's purposes I didn't
really want to get into thecashflow component of it and
play around with this whole lotyou guys can do these same
things if you have chat by now.
If you don't have chat, youshould.
You want to get the plus, atleast membership for it.
(17:50):
Anyway, as far as it equates towealth building, the interest
rate is very nominal in thefigures.
So I've heard now, sinceinterest rates have been higher
the last couple of years, a lotof people are hanging out on the
sidelines Burr investors peoplewho claim to be burr investors
sitting on the sidelines waitingfor rates to go down.
(18:11):
What's going to happen whenrates go down?
Guys?
Rates go down.
Demand is most likely going togo up, okay, and that means
you're going to have morecompetition for the same
properties.
If you guys remember in 2020and 2021, what happened?
We were getting multiple offersway over asking everything else
, so appreciation is going to goup even higher, in my opinion.
(18:35):
I'm not an expert, so I couldbe wrong Okay, but what you're
going to see is, if you buytoday at a seven or an 8%
interest rate and you can getthat thing to break even with
the improved rents, now, whenrates go down, your wealth just
went up, if my hypothesis iscorrect.
So let's take a peek at this.
(18:58):
We're going to look at thischart here.
If you guys remember the chartfrom above, this is equity
growth with a 5.5% interest ratePretty conservative number.
We think we can, probably basedon everything I read, next
couple of years we'll be back tofive and a half percent-ish
numbers.
After five years, with 0%appreciation growth, you're only
at $97,000 of equity and I'mgoing to show you guys a little
(19:20):
side-by-side chart here so youcan see the difference between
the five and a half percentinterest rate and the 7%
interest rate as it relates tohow much equity you've built,
how much wealth you've created.
Okay, so here's a littlebreakdown.
It's going to give me somenumbers on the screen.
We're going to go down to theside-by-side chart here.
All right.
So what?
(19:40):
We're looking at equity, 4%appreciation and 0% appreciation
.
If you guys see the numbers here, I think I actually had it put
the numbers in here for us.
Yes, here we go.
So when we looked at the chartbefore, with 7% interest, after
five years you have almost$93,000 of equity.
After five years, at 5.5%,you've got almost $98,000.
(20:06):
So only a $5,000 difference inyour equity.
Scoot way up over here to the15-year.
It really drops off.
There's really not a bigdifference here.
You're at 206,000 with the 7%interest rate and 213,000 with
the 5.5% rate.
So does the interest ratereally affect your wealth,
(20:28):
ability to create wealth?
Not, in my opinion, that is sonominal, in the grand scheme of
things, that if you're sittingon the sidelines waiting for
interest rates to go downbecause you're going to build
more equity, these numbers wouldprobably dispute that.
Okay.
When we look at the 4% interestrate thing same thing it
doesn't really change a wholelot.
(20:48):
The numbers are just bigger.
At the 15year mark.
The difference is the same.
You've got about an $8,000difference there in equity after
15 years, so not really reallya big difference at all.
Now I said, hey, I've talked tosome of you guys out there and I
(21:08):
like to talk about your goals.
So if you and I have a call andyou're looking to either get
started in real estate or you'restuck or something like that,
typically I'm going to want tofind out what is your goal.
Why are you even doing realestate?
Because the why, as we all know, it's the thing that's going to
push you when times are tough.
Right, and sometimes I talk toyou guys and there's been some
(21:30):
goals.
This has been a common theme.
Man, I want to make 100 G's ayear.
I just want to make 100 G's ayear, then I can quit my job.
Sweet, very doable, okay.
But if you're not makinganything from real estate right
now, it can be a challenge,right, and I'll share an
experience with you.
I bought my first commercialbuilding or apartment in 2019, I
(21:52):
believe I closed on a 16 unit.
I was going from duplexes up toa 16 unit, so it was a pretty
big jump.
And when I ran my numbers mybird calculator I was $300,000
higher than another guy who'dbeen in the game for a long time
right, and I was.
I actually reached out to himabout maybe partnering with me
on it, because I just didn'thave the confidence to own,
(22:14):
operate and run a 16 unitapartment building and his
number was for the 15 at thetime.
He was in the $300,000 range.
With how he ran his number andI'm like man, this guy is so
smart, he knows way more than Ido, and that is still true to
this day.
Very successful real estateinvestor.
He just happened to run hisnumbers differently than I did,
so I had my little birdcalculator and I put it in my
(22:37):
bird calculator and it came outthat I could pay I think it was
around 600,000 for this thingand still build some equity with
raising rents.
I had to raise all the rents.
I was going to have to redo allthe units because well, not all
of them.
There was one building that waspretty new.
It was four, four units on theproperty but I was going to have
(22:58):
to raise all the rents and do alot of the heavy lifting.
It was probably going to be, Ifigured, about a 12-month kind
of intense with my propertymanager turnaround.
It turns out I reallyunderestimated the cost of
rehabbing 16 or 12 units.
Still got a few legacy peoplethere that we've raised rents on
and have not had to spend themoney on doing it, but it was
(23:20):
pretty capital intensive.
So that is one thing I'velearned over time is that you
know you may end up beingcapital intensive on some of
these things and you might.
We might just want to plan forthat, to have some extra laying
around on these.
Burrs Point is I didn't cashflow anything Every month for
two years.
Took anything I made ended upthe next month.
(23:40):
I'd be like, oh, we raisedrents on this guy Doesn't want
to pay it, he's moving out,we're going to have to do a full
turn on it Like, shoot, well,there goes all my quote unquote
cashflow from this month.
Right, same thing It'd be.
You know, maybe I'd get a monthoff, save up a little cash,
build up a little money with theproperty management company,
but the next month same thingguys moving out 10 grand, okay,
(24:02):
Shoot, keep returning them,right.
What ended up happening, though, is I didn't really like I
don't think I really ever had tocome out of pocket for anything
.
I don't think I ever had tofund anything as far as like out
of pocket for this property,but what happened was, two years
later, interest rates were atall time lower in like 2021,
right, interest rates are downand I ended up refinancing that
(24:22):
property with a better rate.
My value came in.
I don't remember exactly whereit was, but I do remember I
pulled out about $230,000 to$240,000 tax-free from that
property.
Now, if I sell it, of courseI'll have to pay tax and blah,
blah, blah, but it was loanproceeds, so it's considered, at
(24:43):
that time, not a taxable event,so in that moment, it's
tax-free.
So I have $240,000, and I didthe math and I'm like man.
I had this thing about twoyears I didn't quote unquote
cashflow anything but two yearslater, I pulled $240,000 out of
this thing tax-free.
That's like 10 grand a monthtax-free, that of cashflow.
(25:04):
I just had to wait two years tocollect my check, but doing the
math on that, that's basicallywhat it equated to, and so I
think about cash flowdifferently.
Now a little bit right.
If you don't need, if you havea W-2, you're getting paid a
good amount of money and youdon't need the cash flow today
to live off of.
This is, hands down, an amazingstrategy.
(25:26):
You should be doing everythingin your power, in my opinion, to
get as many of these BRRRRdeals as possible, because watch
what happens If you wanted tojust make $100,000 a year.
I asked Chad show some examplesof how someone could be able to
buy properties using the BRRRRand those examples we used above
to refinance in five years andbe living this lifestyle that
(25:49):
they wanted, right?
So give yourself five-yearrunway.
Say, hey, man, I'm going tostick this W-2 out five years.
How many deals would you thenneed to buy to pull out $100,000
per year and refinance loanproceeds?
All right, so we ran the sameexample $300,000 ARV BRRR.
Okay, we're going to buy thesame type of deal every year for
(26:10):
five years.
We're going to hold for thefull five years.
Then do a cash out on eachproperty after it hits the
five-year mark and we're goingto treat the net cash out
proceeds, tax-free loan dollarsas quote unquote income.
So this is going to replace us.
Now chat gave us five-yearequity and cash out per property
scenarios Okay.
So they have a conservativescenario.
This is very, very conservative.
(26:31):
7% interest rate, 0%appreciation Okay.
Then they gave us moderate.
They're going to say, okay, ifthat interest rate comes down to
five and a half percent, 0%interest rate or 0% appreciation
, we're going to call thatmoderate Growth, which is where
I would anticipate the realisticoutcome of this to be.
I'm not going to bank on theinterest rate going down or
(26:55):
anything like that.
Even if it does, we saw itdoesn't make that big of a
difference.
Okay, but your growth?
This is where I would probablysay we're going to look at some
of these scenarios as we diveinto this a little bit 7%
interest rate, annualappreciation, average of 4%, and
then optimistic, the onlydifference there is a 5.5%
(27:16):
interest rate, same appreciation.
So how many properties would youneed to buy each year to start
collecting at least 100K a yearin cash out refis once the first
batch reaches five years?
So I'm looking again.
I'm going to go down to thegrowth model here the growth
model.
If you did this, you would onlyneed to buy two deals a year to
(27:37):
be able to refinance every fiveor in five years and have over
a hundred K.
You're going to actually beable to pull out $85,000 of cash
from each of those $300,000properties that you bought today
.
Okay, and you can start thisprocess now, which is insane.
So that's $170,000 a year oftax-free income from buying two
(28:02):
of these types of deals everysingle year.
Isn't that crazy?
I ran this.
I'm like come on right, itcan't be it and it's true.
So in year six this is whatthey're saying Property batch
one hit that five-year mark, soyou cash out refi.
Year seven again, you're goingto buy two a year, two a year,
two a year, okay.
(28:23):
So if appreciation goes uphigher, you need even less doors
or less deals to do.
Again, some factors here,though longer amortization.
So if you do the 25-year loanor the 30-year loan, you're
going to have to have higherappreciation to hit the same
number, or you're just going tohave to delay a little bit, or
(28:43):
again, we're at $170,000 onthese two.
So even if you had 25 years,you'd probably still have enough
equity there to be able to dothe same scenario with just
those two properties.
Could run that again here inchat, but for today's purposes
we're just going to assume that,all right.
So this is a very, verypowerful thing and you can get
(29:05):
really set on this.
Then, too right, if you justsaid, hey, I need two deals a
year, I need two deals that Ican burr, that are going to give
me 60 grand of equity up front,right, or however you want it
to do, that you can get very,very clear on your buy box with
this, all right.
And then I said, okay, hey,appreciation is kind of like I'm
just throwing out 4%.
I think that's beenhistorically pretty accurate in
(29:28):
Northeast Wisconsin at least.
I can't speak for the otherparts of Wisconsin.
It varies all over the place,but I would say, generally
speaking, we could assume 4% isprobably pretty good 2020 to
2022, probably way higher.
We had some massive growth inprices in those couple of years
when rates were really far down.
(29:48):
So I said just give me twoyears, go back two years.
This seems to be from all theagents I talked to.
From everybody else, this seemsto be a more quote, unquote
normalized market Okay, and so Iwanted to look.
I said, just give me Green Bay,appleton, oshkosh and Manitowoc
areas for what has been theactual average of appreciation
(30:09):
and just focus on one to fourunit rental properties.
I don't want to focus, I don'twant to get into like commercial
stuff or anything else, justone to four units.
And I had it do it.
It took 29 minutes for chat todo its deep research and what we
came up with was over the lasttwo years Green Bay has averaged
5% a year on these rentalproperties, so it's over 10%.
(30:33):
Over the last two years.
Appleton was about 3% a year onaverage, so one year it was 7%
and then the market leveled offand was actually down just a
hair year over year.
So it averaged out to 6% inthose two years.
So 3% annually, all right.
Oshkosh mid to high singledigit rates each year.
(30:57):
So median sale price was 7.5%higher in June of 2025 than the
year prior and they're saying anestimate of 6% annual
appreciation over the last twoyears is pretty reasonable.
Manitowoc area I did not realizethis.
Manitowoc has been blowing up.
So about 13 to 14% per yearaverage over the last two years.
(31:25):
It was just insane.
All right, I don't know.
I didn't dive into why that is.
I didn't get into some of thenumbers in here exactly to
figure out if there was someother factor that we didn't
consider.
But I would not bank on 13 to14% per year on average.
But that just goes to show thatdoes happen here in Wisconsin.
So that gave us some scenariosright Now.
(31:50):
I ran through back down here tosee some of the charts.
Now, if we applied thoseupdated figures to each of the
marks, now Manitowoc, they justran this scenario pretty, pretty
crazy here and I don't eventhink it gave me some numbers.
But if you look at the chartyou'll see Manitowoc just blows
up.
But all of them either way,you're doing a pretty nice.
(32:12):
You got a pretty nice updatedgraph here.
The only one was Appleton,which was surprising because I
always thought of Appleton asbeing probably a little bit
higher appreciation than Oshkoshor Green Bay.
But just goes to show.
You know, we're probably prettysafe with our 4% assumption in
some of these things.
So that was my chat GPTexperience.
(32:36):
The other thing I wanted to showyou guys was over here on
offers due.
This is the emails that we sendout.
So this is let me look at this.
I actually ended up buying thisproperty as well and bird this
thing.
I didn't actually get anappraisal done, they just went
off of my cost and assumed itwas going to be higher.
(32:56):
So I do have about 10 grandstuck into this deal just
because I just I went with acredit union.
They had much better rates thanthe community banks and they
typically like more stabilizedstuff.
So I paid cash and then I justrefinanced with a credit union.
But because it was within theirsix month seasoning period or
12 month seasoning period,wherever they had to go off of
(33:18):
my cost, they couldn't go off ofthe ARV.
So, and I was fine with it,it's a lower dollar figure, not
a big deal.
My payment on this thing thoseonly like 320 bucks a month and
I get 13,.
I think I get $1,300 a monthfor this thing.
So that that was a nice pickupthere.
But nobody else wanted this one.
(33:38):
This one was out to the listfor 64, nine.
Nobody bid on this property andso those of you guys listening,
what I'm describing is therewas a mobile home, 1189
Clairville Road in Oshkosh, onabout a 0.41 acre lot, kind of
out in the country a little bitand nobody bid on it, so I just
(33:59):
bought it and now it's a killerproperty for me Down.
The same time I must have beenreally hungry for some deals.
Here was another one.
We reduced the price on thisone, so the week prior we must
have had it out for a highernumber and nobody wanted this
one either.
So I picked this bad boy up andnow I'm going to tell you guys
here's some of the things to becareful of and considerations
(34:19):
with doing burs.
All right, so what we're lookingat is 823 Bond Street, upper,
lower duplex, two bed, one bathper unit and the bottom there's
actually kind of a third bedroom.
The appraiser actually gave meI just got the appraisal back
yesterday he gave me a thirdbedroom down there, so it's
really three bedroom lower, twobedroom upper.
Property management's onlyrenting it out as a two bedroom
(34:42):
on each and it is what it is.
But we're now getting almost1100 a month in rent and I
believe the utility oh yeah, allutilities are split, so I don't
pay any utilities here Now, sohe doesn't pay the water.
I'm still stuck with it, right,but let me talk about this deal
.
So I am all into this thing.
(35:03):
Probably we had to rehab.
We rehabbed both units, did alot of work here.
I'm probably into it for $190.
Right now maybe 180 on it.
I got the appraisal backyesterday.
Guys.
This should have been at leasta 240 ARV.
They gave me 210.
So this is the risk with doingBRRRR If you don't have a cash
backup, if you don't haveprivate money, that could stay
(35:26):
in the deal with you.
If you're doing short-termbridge loans or anything like
that and that appraisal comes inlow, you might be stuck right.
You might be in a bit of apickle there and you might have
to scramble to get somebody tocome help get you some money
back right To pay off yourprivate lender.
So luckily for me, I just didcash on this one.
I actually use cash value lifeinsurance policy, which is a
(35:48):
whole other episode we could getinto and use that.
But now I'm fighting theappraisal right and there's a
way to do it.
I actually use chat again forthis surprise, surprise to fight
the appraisal.
But that is a big risk with this.
This thing should have been a240 ARV.
I wonder if I actually have myrebuttal on here to see if I can
(36:12):
share that with you guys.
Let's see, I don't think I haveit on this one.
So that's a possible risk withthese properties, guys, is you
may end up with something whereyour appraisal comes in low and
now you're stuck in a picklewith it.
But overall, guys, the birthstrategy we have over 100 units.
(36:34):
We've used the birth strategyon pretty much every single one
of them, other than some sellerfinance deals that we've done
where the seller is only askingfor 5% or 10% down or something
like that.
But the vast majority of thesedeals we are using the BRRRR
strategy and it allows us tocontinue to recycle those funds
and we're ramping up our BRRRRstuff.
(36:54):
Right now we're actuallybringing somebody on to do
commercial acquisitions.
So we've used this in theapartment space, we've used it
with trailers, we've used itwith duplexes, single families,
you name it.
You can utilize this strategyanywhere in real estate
investing and it allows you guysto build a lot of wealth very
(37:16):
quickly.
So, again, I wanted to sharethat with you guys.
I appreciate you tuning in withme and listening to my voice for
the last 30, some minutes here,and I appreciate you guys
always tuning into the episodes.
I would love it if you guyscould share this today.
This helps you.
As I say in every episode, letpeople know that you're into
real estate, let them know thatyou're into real estate
investing.
By you sharing this episode,they are going to know that you
do real estate investing andhopefully it helps bring you
(37:37):
deals private money lenders tohelp finance some of these deals
and build your track record andcredibility by sharing the
episodes.
And it helps us get the wordout so we can continue to bring
on guests who are going to bringtons of value for you guys
every single week.
So with that, if you're not onthe buyers list, you can go to
wisconsindiscountpropertiescom.
Join the list.
(37:58):
We just revamped our website alittle bit.
We're still working on it, sogive us a little grace if by the
time this thing drops, it'sstill not perfect.
We're really interested ingetting you guys quality deals.
That's our number one priorityand the website is kind of
secondary.
I would say the same for you Ifyou're new and you're sitting
out there, instead of going outand doing deals, you're sitting
on the sidelines working on awebsite or getting some business
(38:19):
cards or something.
Just go do some deals first,but you can go out to the
website, fill that out, get onthe buyers list, start getting
some of these deals sent to you.
And if you're not ready to geton the buyer's list, you can
give us a call or text on thewebsite and we'll be happy to
have a conversation with you andjust help you feel out your
goals, get you started on a pathto build wealth through real
(38:39):
estate investing.
Thanks for tuning in, guys.
We'll see you on the nextepisode.
What's up everybody?
You are listening to theWisconsin Investor Podcast.
I'm your host, corey Raymond,and today you guys are stuck
with me on a solo episode.
So, before you turn it off andgo somewhere else, hang in there
, because what if I told youthat you could buy a property,
pull your money back out andkeep building wealth over and
(00:21):
over again?
That's what we're gonna getinto today, guys how to build
some massive, massive wealth.
Before I do that, though, ifyou're brand new to the
Wisconsin Investor Podcast, Iwant to just give you a little
bit of insight.
We've been now recording sinceOctober.
I think we're probably comingup on 40, 50 episodes.
You can probably tell, whereveryou're watching this, where
we're at on this thing.
If we you know.
(00:43):
If you're not from Wisconsin,you have no interest in
Wisconsin.
That's totally okay.
Most of what we discuss on thisshow are either success,
successes and failures ofinvestors here in Wisconsin
locally, but we always bring onother experts as well, so we'll
have somebody.
We just had somebody about noteinvesting.
We have accountants on here.
(01:03):
Recently, a few times we've hadaccountants on here.
We have some attorneys that popon, other industry experts,
some mindset and personaldevelopment type people, so we
have a wide range of differentpeople we try to bring on.
So if you're not looking atinvesting in Wisconsin, but you
are a real estate investor, youwant to be a real estate
investor, you're in the rightspot.
We just happen to focus here.
(01:24):
Investor, you want to be a realestate investor?
You're in the right spot.
We just happen to focus here onWisconsin because we think it
is the best market to beinvesting in.
So with that, one of the thingsI always like to plug is
Wisconsin Discount Properties.
Who sponsors this show?
At Wisconsin DiscountProperties, we put off-market
deals in your inbox every singleMonday morning at 6 am, and a
lot of those deals that we putin there are deals that you can
(01:45):
utilize.
This strategy we're going todiscuss today on the episode.
So, for those of you guyslistening, I'm going to do my
best to describe some things.
Those of you guys watching onYouTube, I'm going to have some
different screen sharing.
I'm going to do here in alittle bit and walk through some
different things to illustratesome of the points that I wanted
to make today on the episode,and we're going to also deep
(02:08):
dive this topic in more detail.
Coming up the fourth Tuesday ofAugust we meet at the Woods Golf
Course in Green Bay.
So if you're wanting to make adrive, if you're not around
Green Bay or you're in the area,come on up to that.
We open the doors at sixo'clock for some networking.
We start at 6.30.
It's called the REI SuccessClub.
You can find the REI SuccessGroup on Facebook and join that
(02:30):
group.
I think we're over 1,000 strongnow in there, so join the group
.
But this is the topic we'regoing to be discussing in more
details this upcoming month.
So when you come there to theseevents, it's really more of an
open format.
We have some panelists, somyself and Zach Morgan, who's
been on the show before, will beon the panel and basically
(02:51):
we'll give you a littlebackground on ourselves and then
we open it up for questions foryou, the audience, to fire away
at us, and the topic will bewhat we're going to discuss
today.
But really you could ask usanything at that point.
So without further ado, let'sget into it and if you've been
in this game for a while, youcan probably guess where I'm
(03:14):
going with this episode.
It is my favorite strategy inreal estate investing and it is
called the BRRRR method.
We've been talking in the lastfew episodes about a BRRRR
course that I have.
We're now giving it away forfree.
So if you join our buyers listat
wisconsindiscountpropertiescom,you can talk to Connor or Reese
on our team and they'll get youset up with the course for free.
So check that out.
But this is one of the mostpowerful strategies in real
(03:34):
estate investing and here's whyit's powerful.
A couple of things you canforce appreciation through
rehabbing these properties.
So what we're talking abouthere is the BRRRR and it's an
acronym.
And so, again, for those of youthat are experienced, you're
like oh, I know the BRRRR, thisis going to be elementary, I
already know all about thisstuff.
Hang on, tune in.
We're going to get into someexamples.
We're going to hopefully lighta fire under your butt today If
(03:57):
you're not utilizing thisstrategy or you've slowed down
on it a little bit like myself.
Actually, when I do this episode, I'm like gosh, I got to get
more, doing more of these things.
Right, as I look at the numbersin particular, which we're
going to get into today, I'vegot some examples to show you,
guys that are pretty powerful.
But it stands for buy, rehab,rent, refinance, repeat Okay,
(04:19):
and I could get into all thesemantics of how we're going to
do that.
We'll see how long this episodegoes and if I get into some of
those details, but essentiallywhy that's powerful.
If you were to go and buysomething on the MLS today,
right, and it's turnkey, there'sno rehab needed, the rents are
at market rent.
You're going to put 20 to 25%down on that property, okay, so
(04:43):
if you've got a limited amountof cash available, you are
putting the money down on thatproperty.
Okay, so if you've got alimited amount of cash available
, you are putting the money downon that property and then that
money's going to sit there for awhile.
Right, that property now has toappreciate.
Your tenants got to pay thatdebt down far enough that you
could refinance that property atsome point and pull your
capital back out if you wantedto recycle that money.
So for most people they don'thave briefcases full of cash
(05:04):
just sitting around to go invest, and so when they start
plotting out their real estatejourney, they look at things and
they say, man, I would love toget to say a hundred units,
right, but I don't have thatkind of cash sitting around, you
know, to get to that number.
That's a lot of down paymentmoney to put in, okay, and again
, that doesn't count any kind ofCapEx that would come up and
(05:26):
other things like that.
And so what this strategy allowsyou to do is utilize a smaller
amount of cash.
It doesn't have to be your cash.
You can borrow that money froma friend, family member,
somebody in your network that'swilling to give it to you.
Helocs are a great option touse for this money.
You use that for a short periodof time.
You rehab the property, you getthe rents up to where the
(05:49):
market rent is.
Then you refinance thatproperty.
And why that's important?
When you go to purchase aproperty, banks are going to
look at it typically.
Now there's commercial lendersin Wisconsin, thankfully, that
are pretty creative, and so ifyou have the right connections
at some of these banks, you canavoid some of the steps in this
process.
But traditionally how it worksis they are going to require 20
(06:13):
or 25% down off of the purchaseprice or the appraised value,
whichever is lower.
Okay, so what they're saying islet's say, you bought, you got
a great deal on a property.
You bought it for 50,000, right, you know, right now it's worth
a hundred thousand dollars.
Traditionally, banks are goingto make you, they're going to
(06:34):
lend off of the $50,000 mark.
They don't care that you haveall this equity in the property
at purchase, so you have to buyit.
Then you would have torefinance it anyway If you
wanted to pull that money out.
Most people just leave it sit,okay, so what this allows you to
do is you're recycling capital.
So you buy it, you increase thevalue and, as quickly as you
can do that, you refinance theproperty.
(06:55):
And now, now, let's say, itappraises at a hundred thousand.
Well, now most banks will lend80% of that number.
You now can get $80,000 back,right?
So now you can go do anotherdeal and do another deal and do
another deal.
So it's a very, very powerful,very, very powerful strategy.
Okay, it also allows you tobuild a lot of equity over time,
(07:20):
right?
So it's not a huge cashflowdeal, right?
You're not typically going todo this for cash flow.
You're going to do this tobuild equity.
There's some tax strategiesinvolved.
We did a couple episodes onthat, so I'm not going to get
too much into the tax strategypiece of this, but just know
that that is another hugebenefit to doing this strategy
(07:43):
is some of the tax benefits,especially if you can consider
yourself a real estateprofessional.
And so, overall, to buildwealth again, not cash flow to
build wealth this strategy istough to beat.
All right, now a lot of peopleout there, especially outside of
(08:03):
Wisconsin, are going to turnand they're going to say they're
going to say you can't do thisstrategy anymore.
It doesn't work, right.
And what are they saying?
They're saying you can't finddeals that make sense anymore to
do this on.
They're going to say that youknow you're going to have to
have money stuck in the deals.
There's no way you can get allof your money back out of them.
And that's not true.
(08:24):
We have case study after casestudy that we've done on deals
that we've sold throughWisconsin Discount Properties
where people are pulling all, orat least the majority, out.
They might have 5% stuck in thedeal versus 25% plus all of
their rehab money.
So there's still a lot ofopportunities here, okay.
(08:44):
So what I want to do, guys, Iwant to go through some examples
of this and again, if you havemore questions like how to
finance these deals, all thatkind of stuff there's, there's
the Berg course.
You can get that for free now,or you can come out to our
discussion that we're going tobe having coming up here at the
end of August, all right?
(09:05):
So what I'm going to do, guys,I'm going to share my screen if
I can find it.
So, for those of you guyslistening for the podcast, I'm
going to do my best, okay.
So we're going to do an exampledeal, all right, and here's
some examples and what I did,guys.
I use chat GPT.
If you've been listening tothis show, you know that I'm a
huge chat GPT fan.
Okay, but what I'm going to dois I'm going to use an example.
(09:27):
So what I said is I have a dealthat's $300,000 ARV.
Now I actually have a dealthat's pretty close to this and
I'm going to talk a little bitabout that deal and we're going
to get into a little bit of what, some potential things that can
go wrong with these deals too.
So that is a real possibilityhere, and I'm trying to get my
(09:48):
screen to work so that I canread it and make sure I'm doing
this appropriately.
Here we go, all right.
So I said, yeah, I want a deal.
It's $300,000 ARVs.
Our lenders will refinance 80%of the LTV, which means loan to
value, and I want to showsomewhere we break even every
year in cash flow and we'refocused on debt pay down.
(10:10):
Show an example with a 20-yearamortization schedule break even
cash flow with a 7% interestrate.
7% is about what I'm gettingquoted right now.
It depends on the lender.
Some are 7.5%, some are 8% atthe time we're recording this,
but 7% if you're shopping itaround.
Typically you can landsomewhere around there and I use
(10:30):
a lot of community banks,commercial financing, to do
these.
A lot of those guys arerelationship based, so you might
get quoted a little bit higherrate right now if you're new to
the game or you don't have anestablished relationship with
some lenders, but that's okay,all right.
So what we're going to do hereand I wanted to show 0% equity
(10:51):
or 0% appreciation, becauseyou'll hear people say, oh, you
can't bank on appreciation.
Right, and that's very true.
You don't want to bank onappreciation.
However, I did an episode, asolo episode.
The last one I actually did wastalking about like basically,
why real estate investing?
And what it basically said wasyou know, you gotta have, you
(11:14):
gotta have some some confidencein real estate.
Over the last, I want to say 76years of this chart.
Real estate's only lost value,and this is across the country,
so real estate is very regional,but it's only lost value.
Maybe I think it was six yearsout of 76.
(11:35):
So we're saying, like worstcase scenario, 0% appreciation
for five years in a row, 10years in a row, 15 years in a
row, and the reason I want to dothis was just to show the power
of the wealth building part ofthe debt pay down piece of this.
Okay.
The other important factor tolook at here is we're using 20
year amortization schedules andthese examples Okay.
(11:56):
Now what does that mean?
If you're new to the game, thatmeans that you're going to be
paying more monthly, so you'repaying that loan off in 20 years
versus, like, a 30 year loan.
A 30 year loan is going tospread that out further, so your
cash flow should be higher, butyou're going to pay less in
principle.
So the wealth buildingcomponent of that property is
(12:18):
not as strong.
So you can play with that alittle bit.
Some lenders it's hard to findin the commercial space where
they'll lend 30-yearamortizations on value-add
properties, but they are outthere A lot of them, especially
when you go to credit unionsthey'll go up to 25 years.
Common, very common, is a20-year amortization schedule.
So break-even cash flow verycommon in this space.
(12:41):
You might even be a little bitnegative every year, but let me
just show you the numbers of whythat still might make sense.
So what we're looking at here wehave a $300,000 after repair
value, arv, brrrr deal.
We're going to do 80% loan tovalue, 7% interest, 20 year
(13:04):
amortization and a break-evencashflow.
So on a 30 year, if you'regetting this property, you're
all into it for $240,000.
That's the goal.
Okay Again, maybe you're at 250.
So you get 10,000 stuck into it.
Maybe you're a little bit less.
We're just going to run it asif we get in a great perfect
bird here.
We got all of our money back.
We got our $240,000.
We stuck into the initialpurchase back plus all the rehab
(13:25):
and everything else.
We were all into it for$240,000.
Our initial equity.
When we refinance that propertywe get our $300,000 appraisal.
We have created $60,000 ofequity Day one of that refinance
.
That's pretty cool.
Now what we look at with a 7%interest, 20-year amortization
(13:47):
equity.
After five years we're now upto $92,000.
And this is with 0%appreciation.
So I didn't include anyappreciation of these situations
here.
Equity after 10 years we arenow $139,000.
So a deal that you broke evenon.
You're not making any moneyevery month on cash flow.
(14:09):
You now have $139,000 of equityafter 10 years.
Equity after 15 years Now we'regetting real close to paying
this thing off.
We only got five years left onthe loan.
We're at $206,000.
Now chat wanted to give me afull amortization schedule and
some charts which I'll show youguys here that are watching on
(14:31):
YouTube.
It's just a cool little chart.
It just shows you your equity,everything I just described to
you.
Thank you, chat, for doing that.
All right, very nice.
Okay, give me a little PDF.
Very, very nice of chat to dothat for me, chat to do that for
me.
(14:51):
Now I said show me that sameexample but let's add in 4%
annual appreciation with thesame parameters as the above
example.
Now and I did not check chat'smath, sometimes you have to
check chat's math, but it seemedlike it lined up pretty good
here.
So our equity after five years,now that we added 4% annual
appreciation and so the loan isstill the same, we're at a
(15:11):
$240,000 loan.
We have 60,000 of equity dayone.
We're at a 7% interest rate,20-year amortization schedule on
our loan.
Our equity is now $157,000after five years.
That's just adding 4%appreciation to the formula.
Equity After 10 years.
We're now at 283,000 and ourequity after 15 years remember
(15:36):
we we had an ARV on thisoriginally at 300,000, right,
our equity now is $446,000 after15 years.
All right.
So now we're going to see alittle chart here for those of
you guys looking here, what thatappreciation really does.
And what you can see is by year20, when that loan is paid off,
(15:58):
that property is now doubled invalue.
It's over $600,000 in value,which is 4% annual appreciation.
Nothing crazy here.
We're not talking about slowand steady now.
Some years it may go down, someyears it may be more than four,
but we're going to say average4% and we're going to get into
some numbers.
I had deep research, do somenumbers of Northeast Wisconsin
(16:18):
and what is the average annualappreciation over the last
couple of years, and so we'llget into some of those numbers
here as well.
All right, let's go down.
I said add in the numbers.
Okay, so it did.
It showed us the spread here,so you can see now, for those of
you guys watching on YouTube.
What was the difference in fiveyears?
So 92,000 was our equity afterfive years, with 0% appreciation
(16:43):
.
We add in just a small amountof appreciation, it's 157,000,
so a pretty big spread there.
You look at the 15-year, you'reat 450,000 of equity compared
to 200,000.
That 4% annual appreciationmakes a big difference.
But regardless, even if youhave 0% appreciation 15 years, a
deal that you have no moneyinto is now worth $206,000 to
(17:07):
you.
Well, it's worth more than that, but the equity is $206,000.
Pretty, pretty powerful, okay.
Now another thing I alwaysthought, and until I started
messing around with thesenumbers I thought man, that 7%
interest rate, if it was likefive and a half percent, I
wonder what that would do to myequity.
It would probably be crazy,right?
(17:27):
My thought is like I'm payingmore principal every month, less
in interest.
Now, while that affects mycashflow and I could have done
some cashflow scenarios, but fortoday's purposes I didn't
really want to get into thecashflow component of it and
play around with this whole lotyou guys can do these same
things if you have chat by now.
If you don't have chat, youshould.
You want to get the plus, atleast membership for it.
(17:50):
Anyway, as far as it equates towealth building, the interest
rate is very nominal in thefigures.
So I've heard now, sinceinterest rates have been higher
the last couple of years, a lotof people are hanging out on the
sidelines Burr investors peoplewho claim to be burr investors
sitting on the sidelines waitingfor rates to go down.
(18:11):
What's going to happen whenrates go down?
Guys?
Rates go down.
Demand is most likely going togo up, okay, and that means
you're going to have morecompetition for the same
properties.
If you guys remember in 2020and 2021, what happened?
We were getting multiple offersway over asking everything else
, so appreciation is going to goup even higher, in my opinion.
(18:35):
I'm not an expert, so I couldbe wrong Okay, but what you're
going to see is, if you buytoday at a seven or an 8%
interest rate and you can getthat thing to break even with
the improved rents, now, whenrates go down, your wealth just
went up, if my hypothesis iscorrect.
So let's take a peek at this.
(18:58):
We're going to look at thischart here.
If you guys remember the chartfrom above, this is equity
growth with a 5.5% interest ratePretty conservative number.
We think we can, probably basedon everything I read, next
couple of years we'll be back tofive and a half percent-ish
numbers.
After five years, with 0%appreciation growth, you're only
at $97,000 of equity and I'mgoing to show you guys a little
(19:20):
side-by-side chart here so youcan see the difference between
the five and a half percentinterest rate and the 7%
interest rate as it relates tohow much equity you've built,
how much wealth you've created.
Okay, so here's a littlebreakdown.
It's going to give me somenumbers on the screen.
We're going to go down to theside-by-side chart here.
All right.
So what?
(19:40):
We're looking at equity, 4%appreciation and 0% appreciation
.
If you guys see the numbers here, I think I actually had it put
the numbers in here for us.
Yes, here we go.
So when we looked at the chartbefore, with 7% interest, after
five years you have almost$93,000 of equity.
After five years, at 5.5%,you've got almost $98,000.
(20:06):
So only a $5,000 difference inyour equity.
Scoot way up over here to the15-year.
It really drops off.
There's really not a bigdifference here.
You're at 206,000 with the 7%interest rate and 213,000 with
the 5.5% rate.
So does the interest ratereally affect your wealth,
(20:28):
ability to create wealth?
Not, in my opinion, that is sonominal, in the grand scheme of
things, that if you're sittingon the sidelines waiting for
interest rates to go downbecause you're going to build
more equity, these numbers wouldprobably dispute that.
Okay.
When we look at the 4% interestrate thing same thing it
doesn't really change a wholelot.
(20:48):
The numbers are just bigger.
At the 15year mark.
The difference is the same.
You've got about an $8,000difference there in equity after
15 years, so not really reallya big difference at all.
Now I said, hey, I've talked tosome of you guys out there and I
(21:08):
like to talk about your goals.
So if you and I have a call andyou're looking to either get
started in real estate or you'restuck or something like that,
typically I'm going to want tofind out what is your goal.
Why are you even doing realestate?
Because the why, as we all know, it's the thing that's going to
push you when times are tough.
Right, and sometimes I talk toyou guys and there's been some
(21:30):
goals.
This has been a common theme.
Man, I want to make 100 G's ayear.
I just want to make 100 G's ayear, then I can quit my job.
Sweet, very doable, okay.
But if you're not makinganything from real estate right
now, it can be a challenge,right, and I'll share an
experience with you.
I bought my first commercialbuilding or apartment in 2019, I
(21:52):
believe I closed on a 16 unit.
I was going from duplexes up toa 16 unit, so it was a pretty
big jump.
And when I ran my numbers mybird calculator I was $300,000
higher than another guy who'dbeen in the game for a long time
right, and I was.
I actually reached out to himabout maybe partnering with me
on it, because I just didn'thave the confidence to own,
(22:14):
operate and run a 16 unitapartment building and his
number was for the 15 at thetime.
He was in the $300,000 range.
With how he ran his number andI'm like man, this guy is so
smart, he knows way more than Ido, and that is still true to
this day.
Very successful real estateinvestor.
He just happened to run hisnumbers differently than I did,
so I had my little birdcalculator and I put it in my
(22:37):
bird calculator and it came outthat I could pay I think it was
around 600,000 for this thingand still build some equity with
raising rents.
I had to raise all the rents.
I was going to have to redo allthe units because well, not all
of them.
There was one building that waspretty new.
It was four, four units on theproperty but I was going to have
(22:58):
to raise all the rents and do alot of the heavy lifting.
It was probably going to be, Ifigured, about a 12-month kind
of intense with my propertymanager turnaround.
It turns out I reallyunderestimated the cost of
rehabbing 16 or 12 units.
Still got a few legacy peoplethere that we've raised rents on
and have not had to spend themoney on doing it, but it was
(23:20):
pretty capital intensive.
So that is one thing I'velearned over time is that you
know you may end up beingcapital intensive on some of
these things and you might.
We might just want to plan forthat, to have some extra laying
around on these.
Burrs Point is I didn't cashflow anything Every month for
two years.
Took anything I made ended upthe next month.
(23:40):
I'd be like, oh, we raisedrents on this guy Doesn't want
to pay it, he's moving out,we're going to have to do a full
turn on it Like, shoot, well,there goes all my quote unquote
cashflow from this month.
Right, same thing It'd be.
You know, maybe I'd get a monthoff, save up a little cash,
build up a little money with theproperty management company,
but the next month same thingguys moving out 10 grand, okay,
(24:02):
Shoot, keep returning them,right.
What ended up happening, though, is I didn't really like I
don't think I really ever had tocome out of pocket for anything
.
I don't think I ever had tofund anything as far as like out
of pocket for this property,but what happened was, two years
later, interest rates were atall time lower in like 2021,
right, interest rates are downand I ended up refinancing that
(24:22):
property with a better rate.
My value came in.
I don't remember exactly whereit was, but I do remember I
pulled out about $230,000 to$240,000 tax-free from that
property.
Now, if I sell it, of courseI'll have to pay tax and blah,
blah, blah, but it was loanproceeds, so it's considered, at
(24:43):
that time, not a taxable event,so in that moment, it's
tax-free.
So I have $240,000, and I didthe math and I'm like man.
I had this thing about twoyears I didn't quote unquote
cashflow anything but two yearslater, I pulled $240,000 out of
this thing tax-free.
That's like 10 grand a monthtax-free, that of cashflow.
(25:04):
I just had to wait two years tocollect my check, but doing the
math on that, that's basicallywhat it equated to, and so I
think about cash flowdifferently.
Now a little bit right.
If you don't need, if you havea W-2, you're getting paid a
good amount of money and youdon't need the cash flow today
to live off of.
This is, hands down, an amazingstrategy.
(25:26):
You should be doing everythingin your power, in my opinion, to
get as many of these BRRRRdeals as possible, because watch
what happens If you wanted tojust make $100,000 a year.
I asked Chad show some examplesof how someone could be able to
buy properties using the BRRRRand those examples we used above
to refinance in five years andbe living this lifestyle that
(25:49):
they wanted, right?
So give yourself five-yearrunway.
Say, hey, man, I'm going tostick this W-2 out five years.
How many deals would you thenneed to buy to pull out $100,000
per year and refinance loanproceeds?
All right, so we ran the sameexample $300,000 ARV BRRR.
Okay, we're going to buy thesame type of deal every year for
(26:10):
five years.
We're going to hold for thefull five years.
Then do a cash out on eachproperty after it hits the
five-year mark and we're goingto treat the net cash out
proceeds, tax-free loan dollarsas quote unquote income.
So this is going to replace us.
Now chat gave us five-yearequity and cash out per property
scenarios Okay.
So they have a conservativescenario.
This is very, very conservative.
(26:31):
7% interest rate, 0%appreciation Okay.
Then they gave us moderate.
They're going to say, okay, ifthat interest rate comes down to
five and a half percent, 0%interest rate or 0% appreciation
, we're going to call thatmoderate Growth, which is where
I would anticipate the realisticoutcome of this to be.
I'm not going to bank on theinterest rate going down or
(26:55):
anything like that.
Even if it does, we saw itdoesn't make that big of a
difference.
Okay, but your growth?
This is where I would probablysay we're going to look at some
of these scenarios as we diveinto this a little bit 7%
interest rate, annualappreciation, average of 4%, and
then optimistic, the onlydifference there is a 5.5%
(27:16):
interest rate, same appreciation.
So how many properties would youneed to buy each year to start
collecting at least 100K a yearin cash out refis once the first
batch reaches five years?
So I'm looking again.
I'm going to go down to thegrowth model here the growth
model.
If you did this, you would onlyneed to buy two deals a year to
(27:37):
be able to refinance every fiveor in five years and have over
a hundred K.
You're going to actually beable to pull out $85,000 of cash
from each of those $300,000properties that you bought today
.
Okay, and you can start thisprocess now, which is insane.
So that's $170,000 a year oftax-free income from buying two
(28:02):
of these types of deals everysingle year.
Isn't that crazy?
I ran this.
I'm like come on right, itcan't be it and it's true.
So in year six this is whatthey're saying Property batch
one hit that five-year mark, soyou cash out refi.
Year seven again, you're goingto buy two a year, two a year,
two a year, okay.
(28:23):
So if appreciation goes uphigher, you need even less doors
or less deals to do.
Again, some factors here,though longer amortization.
So if you do the 25-year loanor the 30-year loan, you're
going to have to have higherappreciation to hit the same
number, or you're just going tohave to delay a little bit, or
(28:43):
again, we're at $170,000 onthese two.
So even if you had 25 years,you'd probably still have enough
equity there to be able to dothe same scenario with just
those two properties.
Could run that again here inchat, but for today's purposes
we're just going to assume that,all right.
So this is a very, verypowerful thing and you can get
(29:05):
really set on this.
Then, too right, if you justsaid, hey, I need two deals a
year, I need two deals that Ican burr, that are going to give
me 60 grand of equity up front,right, or however you want it
to do, that you can get very,very clear on your buy box with
this, all right.
And then I said, okay, hey,appreciation is kind of like I'm
just throwing out 4%.
I think that's beenhistorically pretty accurate in
(29:28):
Northeast Wisconsin at least.
I can't speak for the otherparts of Wisconsin.
It varies all over the place,but I would say, generally
speaking, we could assume 4% isprobably pretty good 2020 to
2022, probably way higher.
We had some massive growth inprices in those couple of years
when rates were really far down.
(29:48):
So I said just give me twoyears, go back two years.
This seems to be from all theagents I talked to.
From everybody else, this seemsto be a more quote, unquote
normalized market Okay, and so Iwanted to look.
I said, just give me Green Bay,appleton, oshkosh and Manitowoc
areas for what has been theactual average of appreciation
(30:09):
and just focus on one to fourunit rental properties.
I don't want to focus, I don'twant to get into like commercial
stuff or anything else, justone to four units.
And I had it do it.
It took 29 minutes for chat todo its deep research and what we
came up with was over the lasttwo years Green Bay has averaged
5% a year on these rentalproperties, so it's over 10%.
(30:33):
Over the last two years.
Appleton was about 3% a year onaverage, so one year it was 7%
and then the market leveled offand was actually down just a
hair year over year.
So it averaged out to 6% inthose two years.
So 3% annually, all right.
Oshkosh mid to high singledigit rates each year.
(30:57):
So median sale price was 7.5%higher in June of 2025 than the
year prior and they're saying anestimate of 6% annual
appreciation over the last twoyears is pretty reasonable.
Manitowoc area I did not realizethis.
Manitowoc has been blowing up.
So about 13 to 14% per yearaverage over the last two years.
(31:25):
It was just insane.
All right, I don't know.
I didn't dive into why that is.
I didn't get into some of thenumbers in here exactly to
figure out if there was someother factor that we didn't
consider.
But I would not bank on 13 to14% per year on average.
But that just goes to show thatdoes happen here in Wisconsin.
So that gave us some scenariosright Now.
(31:50):
I ran through back down here tosee some of the charts.
Now, if we applied thoseupdated figures to each of the
marks, now Manitowoc, they justran this scenario pretty, pretty
crazy here and I don't eventhink it gave me some numbers.
But if you look at the chartyou'll see Manitowoc just blows
up.
But all of them either way,you're doing a pretty nice.
(32:12):
You got a pretty nice updatedgraph here.
The only one was Appleton,which was surprising because I
always thought of Appleton asbeing probably a little bit
higher appreciation than Oshkoshor Green Bay.
But just goes to show.
You know, we're probably prettysafe with our 4% assumption in
some of these things.
So that was my chat GPTexperience.
(32:36):
The other thing I wanted to showyou guys was over here on
offers due.
This is the emails that we sendout.
So this is let me look at this.
I actually ended up buying thisproperty as well and bird this
thing.
I didn't actually get anappraisal done, they just went
off of my cost and assumed itwas going to be higher.
(32:56):
So I do have about 10 grandstuck into this deal just
because I just I went with acredit union.
They had much better rates thanthe community banks and they
typically like more stabilizedstuff.
So I paid cash and then I justrefinanced with a credit union.
But because it was within theirsix month seasoning period or
12 month seasoning period,wherever they had to go off of
(33:18):
my cost, they couldn't go off ofthe ARV.
So, and I was fine with it,it's a lower dollar figure, not
a big deal.
My payment on this thing thoseonly like 320 bucks a month and
I get 13,.
I think I get $1,300 a monthfor this thing.
So that that was a nice pickupthere.
But nobody else wanted this one.
(33:38):
This one was out to the listfor 64, nine.
Nobody bid on this property andso those of you guys listening,
what I'm describing is therewas a mobile home, 1189
Clairville Road in Oshkosh, onabout a 0.41 acre lot, kind of
out in the country a little bitand nobody bid on it, so I just
(33:59):
bought it and now it's a killerproperty for me Down.
The same time I must have beenreally hungry for some deals.
Here was another one.
We reduced the price on thisone, so the week prior we must
have had it out for a highernumber and nobody wanted this
one either.
So I picked this bad boy up andnow I'm going to tell you guys
here's some of the things to becareful of and considerations
(34:19):
with doing burs.
All right, so what we're lookingat is 823 Bond Street, upper,
lower duplex, two bed, one bathper unit and the bottom there's
actually kind of a third bedroom.
The appraiser actually gave meI just got the appraisal back
yesterday he gave me a thirdbedroom down there, so it's
really three bedroom lower, twobedroom upper.
Property management's onlyrenting it out as a two bedroom
(34:42):
on each and it is what it is.
But we're now getting almost1100 a month in rent and I
believe the utility oh yeah, allutilities are split, so I don't
pay any utilities here Now, sohe doesn't pay the water.
I'm still stuck with it, right,but let me talk about this deal
.
So I am all into this thing.
(35:03):
Probably we had to rehab.
We rehabbed both units, did alot of work here.
I'm probably into it for $190.
Right now maybe 180 on it.
I got the appraisal backyesterday.
Guys.
This should have been at leasta 240 ARV.
They gave me 210.
So this is the risk with doingBRRRR If you don't have a cash
backup, if you don't haveprivate money, that could stay
(35:26):
in the deal with you.
If you're doing short-termbridge loans or anything like
that and that appraisal comes inlow, you might be stuck right.
You might be in a bit of apickle there and you might have
to scramble to get somebody tocome help get you some money
back right To pay off yourprivate lender.
So luckily for me, I just didcash on this one.
I actually use cash value lifeinsurance policy, which is a
(35:48):
whole other episode we could getinto and use that.
But now I'm fighting theappraisal right and there's a
way to do it.
I actually use chat again forthis surprise, surprise to fight
the appraisal.
But that is a big risk with this.
This thing should have been a240 ARV.
I wonder if I actually have myrebuttal on here to see if I can
(36:12):
share that with you guys.
Let's see, I don't think I haveit on this one.
So that's a possible risk withthese properties, guys, is you
may end up with something whereyour appraisal comes in low and
now you're stuck in a picklewith it.
But overall, guys, the birthstrategy we have over 100 units.
(36:34):
We've used the birth strategyon pretty much every single one
of them, other than some sellerfinance deals that we've done
where the seller is only askingfor 5% or 10% down or something
like that.
But the vast majority of thesedeals we are using the BRRRR
strategy and it allows us tocontinue to recycle those funds
and we're ramping up our BRRRRstuff.
(36:54):
Right now we're actuallybringing somebody on to do
commercial acquisitions.
So we've used this in theapartment space, we've used it
with trailers, we've used itwith duplexes, single families,
you name it.
You can utilize this strategyanywhere in real estate
investing and it allows you guysto build a lot of wealth very
(37:16):
quickly.
So, again, I wanted to sharethat with you guys.
I appreciate you tuning in withme and listening to my voice for
the last 30, some minutes here,and I appreciate you guys
always tuning into the episodes.
I would love it if you guyscould share this today.
This helps you.
As I say in every episode, letpeople know that you're into
real estate, let them know thatyou're into real estate
investing.
By you sharing this episode,they are going to know that you
do real estate investing andhopefully it helps bring you
(37:37):
deals private money lenders tohelp finance some of these deals
and build your track record andcredibility by sharing the
episodes.
And it helps us get the wordout so we can continue to bring
on guests who are going to bringtons of value for you guys
every single week.
So with that, if you're not onthe buyers list, you can go to
wisconsindiscountpropertiescom.
Join the list.
(37:58):
We just revamped our website alittle bit.
We're still working on it, sogive us a little grace if by the
time this thing drops, it'sstill not perfect.
We're really interested ingetting you guys quality deals.
That's our number one priorityand the website is kind of
secondary.
I would say the same for you Ifyou're new and you're sitting
out there, instead of going outand doing deals, you're sitting
on the sidelines working on awebsite or getting some business
(38:19):
cards or something.
Just go do some deals first,but you can go out to the
website, fill that out, get onthe buyers list, start getting
some of these deals sent to you.
And if you're not ready to geton the buyer's list, you can
give us a call or text on thewebsite and we'll be happy to
have a conversation with you andjust help you feel out your
goals, get you started on a pathto build wealth through real
(38:39):
estate investing.
Thanks for tuning in, guys.
We'll see you on the nextepisode.
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